In 2013, Warren Buffett was the fourth wealthiest person on the planet, worth a reported $58.5 billion, thanks to a lifetime of savvy investments through his holding company Berkshire Hathaway [source: Forbes]. A Nebraska native, Buffett is nicknamed the "Oracle of Omaha" for his nearly prophetic intuition for picking winning stocks.
But few people know the strange story behind the creation of Berkshire Hathaway, the global investment powerhouse. In 1927, the Hathaway Manufacturing Co. built a textile mill in New Bedford, Mass. In 1955, it merged with Berkshire Fine Spinning Associates to become Berkshire Hathaway [source: Hudson].
In the early 1960s, the U.S. textile industry was shrinking, and Buffett started buying Berkshire Hathaway stock for cheap and selling it back to the company for a profit. Then the company owners made a critical mistake — they made Buffett mad. The CEO quoted a price to Buffett on a package of stock, but tried to lowball him when it came to the actual sale. A peeved Buffett responded by buying a majority stake in the company and forcing the owners out [source: Hudson].
Buffett eliminated the textile business in 1985 because of foreign competition, but kept the company's name as the corporate holding company for his billions of dollars in global investments. It's hard to imagine a more profitable corporate reinvention that Buffett's takeover of Berkshire Hathaway.